Updated: May 6, 2021
Your initial fundraise should be treated and run similarly to any good sales process.
Utilising both your personal and professional network, you can begin to fill the middle of your funnel quite quickly with warm leads. For the top of the funnel and colder leads, a good old fashioned outbound strategy will help you qualify investor leads and build momentum for your round.
As is almost always the case, you can go into this process expecting a lot of 'no's' along the way - but don't let this get you down. The more conversations you have and the more momentum you build, the better chances you have in raising the round (and of course the quality of your business).
All of this is quite a lot of work, so wherever possible you should be looking to improve the likelihood of investors cold messaging you too. The following tips & tricks should help get Venture Capitalist's, Angels and Investors knocking on your door:
1. Make sure your website design is great.
Typically VCs doing outbound research for deals won't have much to go on (in the absence of a pitch deck) when it comes to understanding what your business does. First impression count and if your website stands out, you will most likely find investors spend a little more time digging. You can also leave your website vague and mysterious, and this sometimes also works.
Ultimately, any way of differentiating yourself and communicating your unique product/service/offering is a good way to excite investors - get creative.
Tips: If possible, avoid common templates from Wix, Webflow or Wordpress. As a founder you are a maker and builder, so this is a great opportunity to showcase your ability in understanding your audience and market.
2. Make sure you are visible across all channels
Unless you're in stealth mode, you should to make sure you are visible across many of the channels that investors use to collect data on startups. Some of these are Pitchbook, Crunchbase and Dealroom as well as social channels such as LinkedIn and Twitter. Investors will use these tools in two ways; 1) specific research on a founder, company or sector (very targeted and looking at mutual connections, potential references, blog posts etc.) and 2) widespread data scraping.
Even if you are running your business in stealth, simply putting 'founder at stealth start-up' or 'something new' on your LinkedIn headline can often draw attention. In every case, make sure your profiles and platform listings are up to date and accurate, particularly at the early stage where investors mainly focus on founder backgrounds.
Tips: Where appropriate, add investors you are speaking to on LinkedIn, as others may pay attention if you have mutual connections.
3. Make sure your messaging is clear
Remember, just as a recruiter will see thousands of CVs each year, investors see thousands of investment opportunities each year, only looking to invest in a handful. As a result, there are associated difficulties in surfacing and accessing information quickly. Why is what you're doing important? How are you doing it differently? Why will you win? Arguably you should be sewing the seeds of answers to these questions the first time an investor lands on your page.
Getting your messaging right (by being succinct, concise and clear) is so important not just for your website, but also within your pitch deck and presentations. Spend the time to really get this right, and also know that bad messaging or framing can negatively impact your chances. e.g. "We are the Uber for gardeners" will most likely turn investors away.
RLC Portfolio company Ribbon used a clean, clear landing page in order to communicate the business proposition quickly and easily to any potential customers and investors.
Tips: Avoid using buzzwords and overused terms such as "We harness the power of AI" or "Deep Learning and Machine Learning". If you use these, be prepared to explain exactly how they will help you win and how you have unique experience in using these technologies.
4. Build and be discussed in public
This one can be a bit of a slog for some founders and the success rate may be relatively low. However, if you are able to unlock the founder <> investor community on Twitter, that is a great way to be seen by investors. The more domain expertise you can demonstrate or the more validation for your product, the higher the chances investors will begin reaching out.
A great example of this is one of RLC's portfolio companies called Cliff.ai - they've spent the past 6 months doing weekly product updates on Twitter and have been building their product in public.
Cliff.ai shared their investor updates publicly over Twitter and saw large amount of inbound VC and customer activity.
This has even led to Jason Citreon, the CEO of Discord, signing up for their product... a great outcome out of the back of some weekly posts on Twitter! And the Twitter flywheel turns a little faster...
CEO of Discord Jason Citron signed up for the cliff waitlist.
5. Appear in the press
Potentially as hard, if not harder than securing investor meetings, is getting the press to write about you. The key here is strong storytelling. Without funding news to announce, how can you get journalists and the world excited about what you're building? Sifted have put together a nice overview here.
Tips: Do not let fundraising or press appearances distract from your wider mission as a business - solving a problem, delighting customers and generating revenue.
6. Build an excellent business.
All the tips & tricks in the world won't help you actually secure the cheque and 'convert leads' so be sure to focus accordingly on what truly matters.
We love talking to founders and taking a look at early-stage start-ups. If you're looking for investment between £250,000 and £1,500,000, please apply via our website here!
Article originally published on RLC Ventures